Mineral Reserve Estimate
06 August 2010 - 4:01PM
UK Regulatory
TIDMMML
ANNOUNCEMENT
6 August 2010
Co-O MINE MINERAL RESERVE ESTIMATE
Medusa Mining Limited (ASX and AIM - MML; TSX - MLL) ("Medusa" or the
"Company"), through its Philippines operating company Philsaga Mining
Corporation ("Philsaga"), announces a newly completed JORC and NI 43-101
compliant Ore Reserve estimation for the Co-O Mine.
The Probable Reserve, as at 21 June 2010, now stands at 505,000 ounces contained
in 1,465,000 tonnes at 10.7 g/t gold.
Conversion of resources this year has maintained the Probable Reserve contained
ounces at a slightly higher level compared to that announced in July 2009 of
500,000 ounces at 14.9 g/t gold in 1,041,000 tonnes. The current Probable
Reserve will allow an approximate 5 year mine life at a production rate of
100,000 ounces per year.
Crosscut Consulting of Queensland, Australia was contracted to complete a
reserve estimation based on the resource wireframe model provided by Cube
Consulting Pty Ltd. Updated Indicated and Inferred Resources were announced on
22 July 2010.
The Probable Reserve was estimated from an Indicated Resource of 1,418,000
tonnes at 13.2 g/t gold containing 603,000 ounces of gold. The estimate was
based on a gold price of US$900 per ounce, a minimum stope width of 1.2 metres
and a stope cut-off grade of 2.62 g/t gold.
Geoff Davis, Managing Director of Medusa commented:
"We have continued to replace mined ounces through the conversion of Indicated
Resources, primarily through underground development and we expect to be able to
annually maintain a mine life of approximately 5 years based on reserves. Narrow
vein mines are well known to operate in this manner and continually extend
reserves and mines lives, in some cases for decades. We are optimistic Co-O will
repeat this pattern."
DISCUSSION
Compared to the information available at the time of the previous reserve
estimate at 14 June 2009, the reserve grade has reduced primarily due to:
* The Indicated Resource grade has reduced from 15 g/t gold as at 14 June
2009 to 13.2 g/t gold as at 21 June 2010, primarily due to the addition of
more veins into the resource estimate, and the re-interpretation of the 3D
vein model reported on 18 January 2010 which resulted in the reduced
influence of the Catto Veins;
* The stope cut-off grade has been reduced from 3.3 g/t gold contained in the
17 August 2009 announcement to 2.62 g/t gold in part due to reduced average
cash costs per ounce being US$213 for the year ending 30 June 2009 to US$184
for the year to 30 June 2010. This has allowed lower grade material to be
included in the reserve;
* Development during the year has added material from more veins, reducing the
influence of the high grade veins; and
* Some of the new veins added to the reserve estimate are narrower than the
minimum stoping width of 1.2 metres assumed for the reserve estimate, hence
additional dilution has been introduced, particularly during on-vein level
development.
Information in this report relating to Exploration Results has been reviewed and
is based on information compiled by Mr Geoff Davis, who is a member of The
Australian Institute of Geoscientists. Mr Davis is the Managing Director of
Medusa Mining Limited and has sufficient experience which is relevant to the
style of mineralisation and type of deposits under consideration and to the
activity which he is undertaking to qualify as a "Competent Person" as defined
in the 2004 Edition of the "Australasian Code for Reporting of Exploration
Results, Mineral Resources and Ore Reserves" and is a "Qualified Person" as
defined in "National Instrument 43-101" of the Canadian Securities
Administrators. Mr Davis consents to the inclusion in the report of the matters
based on his information in the form and context in which it appears.
Information in this report relating to Mineral Resources has been estimated and
compiled by Mark Zammit of Cube Consulting Pty Ltd of Perth, Western Australia.
Mr Zammit is a member of The Australasian Institute of Mining & Metallurgy and
has sufficient experience that is relevant to the style of mineralisation and
type of deposit under consideration and to the activity which he is undertaking
to qualify as a Competent Person as defined in the 2004 Edition of the
"Australasian Code for Reporting of Exploration Results, Mineral Resources and
Ore Reserves" and is a "Qualified Person" as defined in "National Instrument
43-101" of the Canadian Securities Administrators. Mr Zammit consents to the
inclusion in the report of the matters based on his information in the form and
context in which it appears.
Information in this report relating to Ore Reserves is based on information
compiled by Declan Franzmann, B Eng (Mining), MAusIMM. Mr Franzmann is a
full-time employee of Crosscut Consulting. Mr Franzman has sufficient experience
which is relevant to the style of mineralisation and type of deposit under
consideration and to the activity which they are undertaking to qualify as
Competent Persons as defined in the 2004 Edition of the "Australasian Code for
Reporting of Exploration Results, Mineral Resources and Ore Reserves" and is a
"Qualified Person" as defined in "National Instrument 43-101" of the Canadian
Securities Administrators. Mr Franzmann consents to the inclusion in the report
of the matters based on his information in the form and context in which it
appears.
A revised Technical Report will be lodged with Sedar within 45 days of this
announcement.
Refer to the revised Technical Report which was filed on www.sedar.com in March
2010 for further discussion of the Co-O Deposit's geology, structural controls,
drilling, sampling and assaying information, and any known material
environmental, permitting, legal, title, taxation, socio-political, marketing or
other relevant issue.
DISCLAIMER
This announcement may contain certain forward-looking statements. The words
'anticipate', 'believe', 'expect', 'project', 'forecast', 'estimate', 'likely',
'intend', 'should', 'could', 'may', 'target', 'plan' and other similar
expressions are intended to identify forward-looking statements. Indications of,
and guidance on, future earnings and financial position and performance are also
forward-looking statements.
Such forward-looking statements are not guarantees of future performance and
involve known and unknown risks, uncertainties and other factors, many of which
are beyond the control of Medusa, and its officers, employees, agents and
associates, that may cause actual results to differ materially from those
expressed or implied in such statements.
Actual results, performance or outcomes may differ materially from any
projections and forward-looking statements and the assumptions on which those
assumptions are based.
You should not place undue reliance on forward-looking statements and neither
Medusa nor any of its directors, employees, servants or agents assume any
obligation to update such information.
For further information please contact:
Australia
Medusa Mining Limited +61 8 9367 0601
Geoffrey Davis, Managing Director
Roy Daniel, Finance Director
United Kingdom
Fairfax I.S. PLC +44 (0)20 7598 5368
Nominated Adviser and Broker
Ewan Leggat/Laura Littley
Lothbury Financial Services Limited +44 (0)20 7868 2010
Michael Padley/Libby Moss
Canada
Nicholas Sayce, Investor Relations +1 416 822 4404
[HUG#1436215]
This announcement is distributed by Thomson Reuters on behalf of
Thomson Reuters clients. The owner of this announcement warrants that:
(i) the releases contained herein are protected by copyright and
other applicable laws; and
(ii) they are solely responsible for the content, accuracy and
originality of the information contained therein.
All reproduction for further distribution is prohibited.
Source: Medusa Mining Ltd via Thomson Reuters ONE
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